1. The taxes owing plus penalties and interest are paid
2. An error creating the tax owing in the first place has been resolved and agreed with the IRS or Franchise Tax Board
Congress recognized that the resolution of IRS tax problems has not been handled well by the IRS in the past. A Taxpayer Advocate Service was established as sort of ombudsman within the IRS to assist taxpayers resolve tax problems. The goals of the Taxpayer Advocate Service are to protect individual and business taxpayer rights and to reduce taxpayer burden. The Taxpayer Advocate independently represents your interests and concerns within the IRS. This is accomplished in two ways: 1. Ensuring that taxpayer problems which have not been resolved through normal channels, are promptly and fairly handled; 2. Identifying issues that increase burden or create problems for taxpayers: Bringing those issues to the attention of IRS management and making legislative proposals where necessary.
The steps to resolve an IRS tax problem are:
Is the IRS tax debt correct? The IRS does make errors or the tax assessment was based on incomplete or faulty information provided by the taxpayer. The taxed assessed is based on tax returns filed by the taxpayer which could be in error. In cases where the taxpayer has not filed tax returns, the IRS will file one for you and the tax liability is almost certain to be much higher than a properly prepared return. Tax law is very complex which typically requires a tax attorney or CPA to determine what the real tax liability is.
If the tax returns are in error then amended returns could be filed or new correct information is submitted to the IRS.
Once there is an agreed tax liability, the IRS will want to be paid. If the sum is significant or the taxpayer doesnt have the financial resources to pay right away, there are payment plans that can be negotiated with the IRS.
The thing not to do is to make a payment agreement and then not keep up with the terms. The IRS will take swift action to begin asset seizure starting with your bank accounts.
Taxpayers should consider retaining an experienced tax attorney and/or CPA to solve IRS tax problems. John Spurgeon is both a CPA and tax attorney in Pasadena, California servicing clients in the San Gabriel Valley and the greater Los Angeles area. John Spurgeon & Associates have the proven knowledge and experience to effectively deal with an IRS tax problem or the Franchise Tax Board. Please call 626-440-9518 for a complimentary initial consultation.
About John Spurgeon & Associates
John Spurgeon & Associates is a professional services firm located in Pasadena, California with a focus on tax law and related accounting services. They have extensive experience with federal and state income taxes, payroll taxes and sales taxes. They represent business, non-profits and individuals against the IRS and the Franchise Tax Board (California State Taxes). As both tax attorneys and Certified Public Accountants they offer a broad range of tax related services.
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